After what seemed like an eternity of decreasing prices, Ethereum just experienced a bearish breakdown. This downward trend has worried the cryptocurrency market as they’ve been anxiously awaiting an upswing. Although Ethereum’s long-term prospects remain promising, can bulls step up and save the day for Ethereum’s price in the short-term? We’ll examine the current market and attempt to determine if bulls have enough strength to redeem Ethereum’s value.
1. Ethereum in Vulnerable Position as Bearish Breakdown Looms
Ethereum has been in a vulnerable position as of late, with the price of Ether, Ethereum’s native cryptocurrency, down nearly 20% this week and the bears slowly gathering strength. The market appears to be bracing for a significant downward move, as the bears could be set to take control of Ethereum.
Analysts have pointed out some concerning data regarding Ethereum’s price action.
- Firstly, Ethereum has failed to break out of its descending channel, as each attempt to break higher has been met with sharp selling pressure.
- Bitcoin has also outperformed Ethereum considerably since February, meaning traders have been leaning heavily towards BTC instead of ETH.
- Finally, the daily MACD is pointing lower, as bearish momentum is increasing.
2. Bulls Gearing Up to Scale Ethereum Price Wall
Just two days ago, Ethereum hit a wall. This wasn’t just any ordinary wall, however; it was a brick wall, so thick and sturdy it couldn’t be penetrated by any amount of bullish enthusiasm. To put it simply, the second largest cryptocurrency’s price had stagnated, no longer responding to positive news and market sentiment.
That is, until today. Ethereum bulls have finally persevered, bringing the price back up to where it belongs, and even beyond. How have they accomplished this feat? Through a combination of several strategies, which include:
- Technical Analysis: Analysts have studied the market closely to determine key points of support and resistance to help traders make sound buy/sell decisions.
- Sentiment Analysis: Analysts have used a range of sentiment indicators to gauge the collective mood of the cryptocurrency market, allowing them to identify potential bullish opportunities.
- Fundamental Analysis: Analysts have conducted detailed research on Ethereum-related projects to measure their potential for providing impactful returns in the mid- to long-term.
It’s clear that Ethereum bulls have gone the extra mile in their mission to breach the price wall. Whether or not the current price surge is sustainable remains to be seen, but for now, Ethereum is once again on the upward rise.
3. History Suggests Difficulties Ahead for Ethereum Bulls
Ethereum is an exciting prospect, and bull market sentiment on the platform has been high for some time now. But history suggests that difficult times may lie ahead of us.
To begin with, Ethereum has a long and volatile track record. The asset is well known for seeing extraordinary highs and lows, with some surges leading to bubbly prices, and a rush to jump into the market simply to capitalize on the bullish sentiment. But as a result of these surges, Ethereum has gone through several drastic corrections over the years, usually quickly followed by a much slower period of recovery.
- 2017 – saw a remarkable run-up in prices, followed by a huge correction
- 2018 – prices again peaked mid-year and fell sharply down from there
- 2019 – ended with prices lower than where they began the year
The short-term gains that have been seen in Ethereum have tended to be fleeting and temporary. It is always possible that the asset may rise and remain high for a while, but past performance doesn’t provide much assurance that this will happen. Ethereum bulls should remember this and be aware of the risks associated with taking a bullish stance on the platform.
4. Does the Market Have Enough Firepower to Overcome Bearish Trend?
The market has shown remarkable resilience over the past few months, despite facing several bearish headwinds. Investors remain on tenterhooks, waiting for the market to show definitive signs of strength that will push past the bearish trend. But, does it have enough firepower? Here are some points to consider:
Fundamental Factors: A key factor determining the market’s future direction is the fundamental economic indicators. Factors such as inflation, GDP growth, unemployment and job creation all play a role in how the market behaves. Positive news on these fronts could provide the necessary momentum to break through bearish sentiment.
Sentiment: Another key component is sentiment. If investors remain skeptical, then a bearish trend could easily ensue. However, if sentiment changes and the market perceives a bright outlook, then the current bearish trend could be reversed.
- Analysts must closely monitor both fundamental and sentiment indicators in order to accurately gauge the market’s potential.
- Right now, the market appears poised and ready to take off, but it’s impossible to tell if it will be able to overcome the bearish trend.
5. Outcome of Bull Run on Ethereum Price Depends on Multiple Factors
When it comes to predicting the effect of bull run on Ethereum prices, one can never get the same answer twice. This is due to the fact that the outcome of the Ethereum bull run depends on multiple factors, which have to be factored in before any analysis can give reliable results.
Factors Influential for Bull Run on Ethereum Price:
- The amount of capital being deployed into Ethereum projects: The higher the capital being poured in, the better the results of the bull run on Ethereum prices.
- The number of bullish investors: If the number of bullish investors is substantially more compared to bearish traders, this provides a big bullish momentum for Ethereum and, in turn, impacts the outcome of the bull run.
- External trends: Ethereum’s price is heavily influenced by its performance in relation to Bitcoin and other altcoins. Depending on how it fares compared to them and other external factors such as macroeconomic money movements, Ethereum prices can move either higher or lower.
At times, the sentiment around Ethereum trading can create a positive feedback loop wherein bullish investors snub bearish traders, driving the price of the cryptocurrency higher. Optimism and fear are two sides of the same coin and the market often behaves in accordance with collective perceptions of Ethereum lifecycle.
Regardless of what is currently gazed upon as the most likely outcome of the bull run on Ethereum price, what is universally accepted amongst the cryptocurrency investors is that Ethereum is one of the pioneering projects amongst digital assets, and many expect the ETH to only go higher.
It is difficult to predict where the Ethereum price will go from here, but for now, it looks as though the bears have the upper hand. With much of the market still looking forward to the potential of Ethereum, the bulls can’t be counted out just yet as they may still be able to reverse the course of the current bearish breakdown. Only time will tell how things turn out, so all we can do is sit back and observe.